Wall Street Falls as Alphabet Revenue Miss Reignites AI Spending Concerns; Nasdaq Drops 1.66%

U.S. stocks retreated Thursday as Alphabet's disappointing quarterly results revived investor anxiety over massive AI capital spending. The Nasdaq Composite fell 441.15 points, or 1.66%, to 26,108.35, while the S&P 500 lost 48.73 points, or 0.63%, to 7,695.25 and the Dow Jones Industrial Average dropped 315.36 points, or 0.59%, to 52,163.07. The small-cap Russell 2000 gained 0.8%. Alphabet shares plunged 13.2% after the Google parent's late-Wednesday report showed a revenue miss compounded by accelerated AI-related cash burn. Semiconductor stocks fell 2.0%, poised to snap a four-day winning streak, as investors differentiated companies able to fund AI ambitions from those burning cash. The Fed held rates steady Wednesday, citing "elevated" price pressures. Third-quarter GDP grew faster than expected, while price growth accelerated on a war-related oil supply crunch. Of 253 S&P 500 companies that have reported, 81% beat estimates, with aggregate earnings growth now expected at 31.0% year-on-year, per LSEG. Caterpillar fell 9.5% despite topping profit estimates. Eli Lilly rose 6.3%, Merck gained 4.4%, and Ford added 2.9%. Fortinet and ServiceNow each dropped more than 20%; Marvell Technology slumped 12.8%.